Introduction
The enterprise resource planning (ERP) is integrated software used to manage and coordinate various departments across the company. It is therefore used to efficiently centralize and combine the activities and operations from different departments. Basically, the ERP software enables information sharing between different departments; thus enhancing a smooth flow of information which positively impacts on the organization’s management and the decision making process. The ERP is usually formal and follows a piecemeal implementation process. The convectional IT projects are the alternative software that firms usually installs to assist and enhance the information sharing within its departments. They are usually simple and easy to implement within the firm. Moreover, the businesses process management with the SAP ERP is also aimed at establishing efficiency within the various organizational departments. This paper seeks to analyze the business process management with the SAP ERP.
Why the ERP projects are time-consuming and expensive?
The lengthy process required to fully and successfully install an ERP project makes it time consuming and more expensive than the other conventional IT projects. In addition, the project complexity and broad perspective demands for lengthy training sessions to the organization’s staffs. Since the project focuses on meeting the overall business objective, it involves practically almost each and every person in the organization. The project also requires very expensive infrastructure which includes computers, networking cables, and a special room which acts as a server to the project. It also requires that the organization hires a computer programming and networking specialist to oversee the overall project implementation. This is however not the case for the conventional IT projects which are user friendly and require minimum training sessions (Stefanou & Revanoglou, 2006, p. 120). The conventional IT projects are also simply designed in order to ensure user friendliness and acceptance in the market. The firm should therefore seek to address the market needs as that is the only way the project implementation can be efficient and successful.
The bit-by-bit ERP implementations process is also time consuming. The organization should therefore allocate longer period for the project implementation process. Indeed, this piecemeal implementation process is not a bad option though can lead to major delays if not well planned. Oftentimes, majority of firms fail to access the net present value of the project which will assist the implementers to check the viability of the project into the future. The ERP project also emphasizes on a certain implementation guideline which ought not to be violated no matter what. Ideally, this lengthy procedure makes it hard for the implementers to successfully hit the projects target (Adam & Sammon, 2004, p. 59).
The ERP is mainly perfect for the large organization with branches all over the world. For the small and medium sized enterprises, the ERP tends to be uneconomical due to the high cost involved in the implementation process. The computer integration involved in the ERP and the other relevant infrastructure makes it even more expensive to the small and medium scale enterprises. As an alternative course, the small and medium scale enterprise opt to use other convectional IT projects such as the enterprise CRM project and the datacenter efficiency project.
Why the ERP projects bare higher risks than conventional IT projects?
The complexity of the ERP projects increases their vulnerability as the users cannot effectively and efficiently utilize it without having difficulties. Their broad definitions also provide a room for errors and shortcomings during the implementation process. The complexity also makes it difficult to let the organization staff understand the main objective of the project in the firm. It is therefore vital for the organization to educate its members on the need and the core objectives of the new software implementation. Such knowledge can assist the firm to effectively embrace and see the need to have a change in the overall running of activities (Reed & Doane, 2004, p.27).
As a requirement, the ERP project requires total commitment of the organization’s top management. However, this is not accorded when it comes to the actual project implementation. Indeed, there is a risk of non commitment by the top management to the ERP project which translates to sluggish economic return within the organization. This is however not the case since the majority of people in the top positions fears technological changes. This project resistance therefore poses a great threat to the ERP implementation.
The fixed and rigid nature of the ERP projects fails to effectively cater for the current IT needs within the organization. Since this project is not as flexible as the current information technologies in the world, the firm will always be left behind as far as the technology is concerned (Madu & Kuei, 2004, p. 31). The ERP should therefore seek to adequately meet the current technology definition. This can only be done by allowing continuous improvement of the project in order to accommodate new technology changes as they come. The ERP is also poorly packaged; this is more so as the project mostly seeks to address the firm’s needs instead of the clients’ and customers’ needs.
The poor packaging of the ERP software increases resistance in its marketing. It is therefore appropriate for the ERP to address the basic functions of the clients such as the customers needs for it to be efficiently marketable within the market. In most cases, the ERP projects are expensive, making the clients to inadequately finance the overall project, and as a result the project fails to attain the expected results (Glenn, 2008, p. 60). It is therefore advisable for the clients to ensure that they have enough financial capacity to oversee a complete implementation of the ERP project for them to fully obtain maximum project’s benefits.
The ERP software is generally not user friendly. This therefore limits the client’s capacity as both technical and expertise knowledge is required to guarantee its success. This, in most cases, acts as an extra cost to the firm which intends to implement an ERP project design (Isaca, 2009, p. 234). The ERP is also coupled with unrealistic timeframe expectations which further frustrate the users. Basically, the ERP uses the bottom-up implementation approach which is usually resisted by the top management officials within an organization. The top management views this as a way of letting the junior staffs to make decisions which threaten their power and authority. Moreover, the ERP projects are more time consuming as they are partially implemented in an organization. The project also requires adequate staff training in order to familiarize them on how to use it in their daily organizational activities.
Discussion on how to deal with SAP configuration problem “lot-sizing”
The SAP business software assists the organizations and firms to effectively manage their resources towards the overall achievement of the firm’s objectives. SAP therefore assists the organization to optimize its resources as it improves the production efficiency and also advocates for quality services (Padhi, 2009, p. 168).The SAP software however has a wide product range as it seeks to adequately serve client’s needs. Among the bundles that the SAP provides includes the enterprise resource planning (ERP), the supply chain management (SCM), the customer relationship management (CRM) and the product lifecycle management (PLM). All these products are meant to improve efficiency within the firm’s operations (Su & Yang, 2010, p. 81), as well as ensure that the organization meets it core objectives in relation to resource planning, procurement, customer satisfaction and profitability among others.
The SAP configuration problem mostly emanate when the users are unclear to the new configurations. And since the whole operation of the project is automatically synchronized to operate on command, such unclear details may cause huge problem to the project. In order to effectively deal with such a problem, the project administrator should ensure that all the software users are much aware of all the relevant details in the project. This can be done through a thorough training sessions on how to use the SAP configuration. However, the problem usually arises since the configuration work should be given to a specialist in the IT department.
The overall SAP configuration manual should be fully documented in order to prevent errors during the implementation process. Since the lot-sizing procedure should seek to ensure maximum utilization of the available resources within the organization, a complete understanding of the project is required. For instance, the company can opt to configure its human resource department by establishing the maximum and the minimum workforce that is required in every department at a given period of time. This move therefore assists the organization to operate within its budget at all times. Such configuration also enhances accountability among the workforce (Coetzer, 2010, Para. 4).
The SAP configuration problem can also be established if the users are not aware of how the software integrates with other modules in the organization. Such problem occurs if the SAP trainer offers general context of the project thus limiting the understanding capacity of the users. This problem however can be solved by ensuring that the training session fully equips the staffs with specific details on how to handle the software configuration processes. Since the lot-sizing configuration is established to limit the operations of all the organization’s department, adequate training to all the staffs should be done (Anderson, Nilson & Rhodes, 2009, p. 532). The lot size restriction prevents the procurement department from purchasing order beyond the maximum lot size. The department is also restricted from purchasing quantity below the minimum lot size. In some instances, some organizations have a limited or fixed size lot that the procurement officer should purchase; any deviation to the size restriction is automatically detected by the SAP software.
Incase of a product lifecycle management, the firm can either use the optimizing, periodic or the static method to establish the demand plan (Jones & Burger, 2009, p. 276). The optimizing method can either use the demand-driven, consumption-base or the inventory holding cost to determine the appropriate time to purchase or manufacture products in a firm. Basically, the periodic method is similar to the optimizing method, but the static method usually ensures that the stock within the firm remain at the maximum level. The firm can therefore meet the stock requirement differently depending on the movement of the products within the market. for instance, the firm might use the hourly, shift, daily, weekly, monthly, quarterly or flexible lot size technique to replenish its stock whenever due (Law, Chen & Wu, 2010, p. 297). All these strategies are meant to ensure that the firm efficiently serves its consumers in due time. It is also aimed at ensuring that the organization does not incur extra cost in storing and maintaining the stocks within their premises. The storage and the administration cost are therefore significantly reduced and consequently increase the profitability level within a firm. The organization may further determine the size through which it will be selling its products. This is mostly applicable to the manufacturing companies which produce consumer goods (Sonkusare, Sharma & Mutsaddi, 2009, p. 209).
Through the use of the SAP software, the firm can limit the selling capacity as either big lot or small capacity. By so doing, the prices of the big lot will be stated as well as that of the small lot. This price fixation will ensure that the marketing department together with the accounting department do not collaborate to extort extra money in the process. The lot-sizing problem however can greatly affect the organizations operations as it can totally paralyze its operations. As quite a big number of people are involved in the procurement activities, the SAP lot-size restrictions always proves a hard task to effectively coordinate.
The time allocated for dealing with decision problem in a real SAP project
A good information policy will seek to use minimum time possible to solve a decision problem. This is because the project should seek to greatly reduce the risk level and thus increase its marketability. Generally, it is important to directly involve the human resource department in the decisions of SAP problems mainly because the HR department is the one which implements the project within the organization. The company should also use the project operational leader to effectively maintain and implement some of the SAP solutions within it. Such expert can either be permanently employed or even hired by the company on contract basis. In addition, the decision process can be speeded up if the expert has technical and communication skills to deal with the emerging SAP problems. It is also advisable for the company to obtain competent and experienced personnel who have wider knowledge on the SAP project. This is because such knowledge can also be used to speed up the decision making process. It will also increase confidence in the operation as the expert may have been exposed to a similar problem in the past. The time spent in the decision making problem will therefore differ between different companies since the approach will dictate the outcome and the time consumed. Basically, a company which strategically places itself well will take a considerably shorter time compared to others. The project knowledge will also speed up the decision problem in a real SAP project.
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